Australian Property

Viewing posts in the Australian Property category

RP Data weekly Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 20 November 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.24%.  It was the first decline in nine weeks (see next chart). Home prices fell in three major capitals and rose in two (see next chart). Since the start of the year, home values nationally have risen by 7.43%, with all major capitals except Perth rising in value (see next chart). Over the past 12 months, home values have risen by 8.79% at the 5-city level, led by Sydney and Melbourne (see next...
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Why house prices are rising more than credit

ScreenHunter_02 Apr. 09 08.45 By Leith van Onselen Just over a year ago, Victoria's Department of Sustainability and Environment (DSE) was closed and amalgamated into other departments, and with it I thought its excellent data on the number of housing transfers and mortgage lodgements/discharges had been lost. Searching the Victorian Government's database last night, I stumbled upon this same data on the Department of Transport, Planning and Local Infrastructure (DTPLI) website, which shows a massive surge in the number of mortgages and transfers over the past year 18 months (see below charts). As you can see...
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China’s great Australian land grab

ScreenHunter_5081 Nov. 20 11.19 By Leith van Onselen As part of the Australia-China Free Trade Agreement (FTA), concluded on Monday, the foreign investment limits on Australian commercial real estate will be increased from $54 million currently to $1.078 billion, effectively giving Chinese developers unfettered access to Australian land. While many argue that increased participation by Chinese property developers will boost Australian housing supply, thereby improving rental availability and housing affordability, some local developers have accused Chinese developers of land banking - paying over the odds for lots and sitting...
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ACT Government stops affordable land supply

ScreenHunter_5080 Nov. 20 10.36 By Leith van Onselen I have explained previously (here, here and here) how the ACT Government deliberately manipulates urban land supply in order to maintain exorbitant land/house prices. Despite having an abundance of developable land, the Government has for a long-time drip-fed supply to the market, maintaining an artificial land shortage (scarcity) and, in the process, forcing buyers to pay high prices. According to Australian Property Monitors, the median Canberra house cost a whopping $573,000 as at September 2014, with the median house rent a ludicrous $450 - ludicrous because the...
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Australian housing is not “fairly valued”

ScreenHunter_3949 Sep. 02 08.10 By Leith van Onselen Moody's Analytics (not to be confused with Moody's Investors Service, the credit ratings agency) released a new report in the past few days arguing that Australian housing is "fairly valued as the long-run drivers of house prices—rents, incomes and interest rates—are supportive of current prices". Let's take a look. Why is Sydney so expensive? First, house prices in Australia are high compared with the rest of the world’s because of the rela- tively strong economy, helped initially by the mining and commodity boom, although commodity prices have cooled in 2014; a tax...
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Saul Eslake’s colleague, Alex Joiner, sees housing rollover

zdgfwe The media is reporting that the following is from Saul Eslake but it was actually written by his colleague, Alex Joiner. It is republished with permission: In Focus: Property market at a cross roads The Australian public’s infatuation with property is well documented. Perhaps justifiably so given the wealth it has created over the past few decades. But challenging economic conditions in the coming year and then an inevitable future monetary policy tightening cycle seems to have the residential property market headed into uncharted territory. Further, despite interest rates likely staying...
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RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 16 November 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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Auction clearances bounce

ScreenHunter_19 Mar. 13 13.12 The national auction clearance rate bounced over the weekend on the back of big rises in Sydney and Melbourne. According to RP Data, the national weighted average preliminary auction clearance rate was 69.0% over the weekend, which was up 5.3% from the 63.7% preliminary clearance rate reported last weekend. Sydney’s clearance rate jumped by 6.2% to 75.2%, whereas Melbourne’s jumped to 66.7% (last weekend 63.8%). Brisbane, which typically only has a small number of auctions, experienced little change in its clearance rate (up 0.3% to 45.3%). However, overall auction volumes (3,210) were up...
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Thelma and Louise do Oz housing

ScreenHunter_5039 Nov. 14 15.03 From David Collyer at Prosper...
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Weekly RP Data Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 13 November 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose 0.03%.  It was the eighth consecutive weekly increase (see next chart). Home prices rose in all major capitals except Melbourne (see next chart). Since the start of the year, home values nationally have risen by 7.69%, with all major capitals except Perth rising in value (see next chart). Over the past 12 months, home values have risen by 9.04% at the 5-city level, led by Sydney and Melbourne (see next...
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Treasury probes illegal foreign property

chinese-corruption-200x200 By Leith van Onselen From The AFR today comes news that the Australian Treasury is investigating 33 cases of potential illegal purchases of pre-existing Australian homes by non-residents: The federal Treasury said it was investigating 33 potential breaches of the law involving established residential properties. A small number of these involved “very high-value established purchases”, Treasury said. “In most instances the investigation activity involves the need to establish the identity of the relevant investor and to assess their eligibility to own the property in question.” It is...
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Sydney property investor bubble enters Twilight Zone

imgres By Leith van Onselen The speculator frenzy that has engulfed Sydney’s housing market just won't quit, with yesterday's Lending Finance data for September, released by the ABS, once again smashing all records, with both the value and proportion of mortgages going to New South Wales investors surging to another all time high. As shown below, the value of investor loans in New South Wales (read Sydney) continues to rocket, with Victoria (read Melbourne) – the second hottest market – also experiencing strong growth: According to the ABS, investor finance commitments in New South Wales in...
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The Melbourne ghost city revealed

ScreenHunter_4940 Nov. 12 08.24 By Leith van Onselen Prosper Australia has released its annual speculative vacancies report, authored by Catherine Cashmore, which has revealed that parts of Melbourne's inner-city apartment complexes are becoming 'ghost towers', with large numbers of unused or barely used homes. The report is unique because it uses water use data from Melbourne's three main metropolitan water retailers to determine whether a home is being used, with very low recordings of water consumption data used as a proxy to determine vacant dwellings. Speculative Vacancies (SVs) are measured as properties with...
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FIRB foreign property surveillance in disarray

ScreenHunter_4345 Sep. 24 06.40 By Leith van Onselen Following yesterday's revelation that the Foreign Investment Review Board (FIRB) has issued just 17 orders (out of at least 30,000 sales) to foreign property investors to dispose of their illegally held assets since 2003, along with the finding in September that FIRB had failed to prosecute a single foreign buyer in eight years, The Australian has today revealed that FIRB has been undertaking their surveillance of foreign property investment blindfolded, with immigration officials admitting they do not tell FIRB when temporary residents who have bought properties leave...
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How long can investors juice the housing market?

ScreenHunter_4910 Nov. 10 15.20 By Leith van Onselen Yesterday's housing finance data for September, released by the ABS, revealed a housing market that has become even more reliant on investors to generate growth. As shown in the next chart, the near parabolic growth of investor mortgages continued in September, up 29% over the year and comprising an unprecedented 47.8% of total housing finance commitments (excluding refinancings) - exceeding the mid-2004 ("bubble") peak of 46.4% (see next chart). While investor mortgage demand continues to reach for the stars, the story is entirely different for owner-occupiers, where...
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Sydney’s median asking price tops $1 million. Hilarity ensues!

ScreenHunter_02 Apr. 23 10.34 From SQM Research comes news today that Sydney’s median asking price for free standing houses (includes terraces, but excludes townhouses) has surpassed the one million dollar mark for the first time, clocking in at $1,005,800: Managing Director of SQM Research, Louis Christopher argues that “right now it would be impossible to purchase a free standing house in Sydney’s inner ring for under a million dollars, and will become increasingly difficult to purchase a free standing house in Sydney’s middle ring for under a million dollars”. What could possibly go...
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ABS house price gains ease

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen The ABS has today released its property price index – incorporating both detached houses and units – which registered a 1.5% rise in values nationally over the September quarter and a 9.1% gain over the year, down from the 10.1% annual growth recorded in the year to June 2014. As expected, the growth in property values was once again driven by Sydney – investor central – where prices rose by 2.7% over the quarter and by 14.6% over the year. Solid gains were also posted in Melbourne (+6.9% YoY), Brisbane (+6.7% YoY), Adelaide (+5.6% YoY), Hobart (+4.3% YoY), Perth...
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Chinese losses on Australian property mount

dfd Given the official pressures coming to bear on the safe haven Chinese trade in Australian property, I thought I'd take a look at the market dimensions of the trade. If a Chinese investor is buying Australian real estate but remains in China then the critical calculation is the value of the property in Chinese yuan. Here is the chart comparing the AUD/CNY and house prices over the past two decades: And the money chart, the growth of Australian property values in Chinese yuan: Peak value was reached in 2010 when the Australian dollar was trading well above parity. Since then property...
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More FIRB foreign property failures revealed

ScreenHunter_4345 Sep. 24 06.40 By Leith van Onselen The Australian has revealed further failings by the Foreign Investment Review Board (FIRB) in regulating Australia's foreign investment regime into residential property. Despite some 30,000 approvals for foreigners to purchase pre-existing homes (let alone the thousands of potential unapproved sales), and rules in place to require temporary residents to dispose of their properties once they leave Australia, FIRB has issued just 17 orders to dispose of their illegally held assets since 2003: FIRB officials appearing before the committee had sought to avoid providing data on...
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Chinese move to catch property falling knife

smallfallingknife From the AFR: Compass Global Markets chief executive officer Andrew Su said in recent weeks he has received higher levels of inquiry from Chinese clients looking to make foreign exchange transactions in a bid to buy property. ...“They’re in touch, and they tell me property is looking a lot more affordable now.” Many Chinese are capitalising on foreign currency moves to buy higher quality apartments than what they originally set out to buy, CBRE project marketing director Peter Li said. “I think the number of people in the market will stay the same, but they can now afford a...
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New home finance strengthened in September

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen Today’s housing finance data for September confirmed that buyer demand for newly constructed dwellings remains relatively strong (see next chart). The number of finance commitments for new dwellings (i.e. construction plus new) jumped by a seasonally adjusted 2.1% in September to be up 10.9% over the year and tracking some 20% above the 5-year moving average level. And while the current 'boom' remains smaller than the post-GFC episode (which was fueled by significant first home buyer stimulus), it appears to be more enduring, which is good news for the...
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Investor mania crowds out owner-occupiers

euphoria-300x204 By Leith van Onselen The Australian Bureau of Statistics (ABS) has released housing finance data for the month of September, which registered a 0.7% seasonally-adjusted fall in the number of owner-occupied finance commitments over the month: The result missed analysts’ expectations, who had expected a 0.4% fall in owner-ocupied finance commitments in October. The number of owner-occupied housing finance commitments excluding refinancings rose by a seasonally-adjusted 0.5% over the month to be tracking 7% above the five-year moving average level. However, they were down 1.4% on September...
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Sell Australian property

url From Morgan Stanley today: The East Coast Recovery Has Stalled Though the ‘housing-led’ part of the Australian macro storyline  has come through (perhaps a little too quickly), we see no room  for complacency. In particular, we explore four shocks that  have come through in recent months, increasing the degree of  difficulty for Australia’s ‘great transition’: External – The supply shock in bulks, combined with further  signs that China will accelerate its rebalancing and reform  agenda has impacted the terms of trade. Fiscal - The alarmist Budget narrative has damaged animal...
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Calls to ban negative gearing grow louder

ScreenHunter_4883 Nov. 10 08.38 By Leith van Onselen Late last week, ABC's 7.30 Report ran an excellent segment investigating negative gearing and its impact on the Australian housing market. The segment features long-time opponent, Saul Eslake, who calls for negative gearing to be 'abolished' (i.e. quarantined so that rental losses cannot be offset against unrelated wage/salary income): "We've reached a point now where investors account for more than half the borrowing that's undertaken for the purchase of established properties and nearly half of all the borrowing for purchases of properties of any type. In my view, it's...
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Abbott mulls extradition for dodgy Chinese money

chinese-corruption-200x200 Blows are being rained upon the Australian property boom, from the AFR: The Abbott government is ­considering an extradition treaty with China to help Beijing repatriate corrupt officials and confiscate their assets. Foreign Affairs Minister Julie Bishop said the treaty would be part of the ­Beijing declaration on anti-corruption that Australia and other nations in the region will sign at this week’s Asia-Pacific Economic Co-operation meeting. “China has requested one and it’s under consideration, with a number of other countries,” she told The Aus­tralian Financial...
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